Who Has to Pay Up?

Would it be to my advantage to make extra payments of about $100 per month toward the principal for those first 10 years?

I don't plan to move in the next five to 10 years, but one never knows what the future holds. -- Mrs. G.

DEAR MRS. G.: If I understand the terms of your mortgage correctly, your interest payments for the first 10 years will be about $700 a month. After that time, your monthly payments for principal and interest will jump to more than $900 per month.

Paying an extra $100 a month for 10 years would reduce your overall payments by significantly more than $12,000 because as you make each payment, the principal becomes lower and thus the interest that you have to pay over the long term will be reduced. And at the end of the 10 years, your mortgage payments will still increase, but not by much. (You can find calculators on the Internet that help you figure the exact numbers, or you can consult your lender.)

That sounds like a good plan, but you do not want to be house-rich and cash-poor. You need to determine whether you can afford those extra payments now or whether they would eat into your savings.

And while no one knows what their financial situation will be 10 years from now, do you think you will have enough money for the higher mortgage payment? If you have concerns about your ability to make that higher payment 10 years from now, you may just want to put that extra $100 into a savings account or a certificate of deposit that gets you the best interest rate your bank will offer. Then, 10 years from now, you will at least have built up a nest egg of $12,000, plus interest.

You may also want to watch the mortgage market. If 30-year fixed mortgage rates come down somewhat, you might want to get rid of that interest-only loan and get a fixed rate. At that time, it definitely would make sense to start paying extra each month.

I recently purchased a home and received a disclosure form that stated that the previous owner had died in the house. I did not have a problem with this. However, after I moved in, a neighbor told me that the previous owner was dead in the house for more than two weeks and that her body had decomposed on the carpet. This explains the smell in the house.

Now I have to change the carpet to remove the smell. Do I have any way of recovering at least some of the cost of replacing the carpet since the seller and the agent failed to mention the full specifics of what had transpired in this house? I feel that they acted in bad faith by hiding this important fact from me. I would not have bought this house had I known this. -- Carlos

DEAR CARLOS: There are some state laws that specifically require sellers to disclose to potential purchasers that there was a death on the property. However, in the absence of a provision in your state law that requires more detail than that, you may be out of luck.

Read the disclosure form carefully; is there a question that would assist you, such as "Are there any unusual things about the house?"

My advice to all potential buyers is to ask, "What else do you know about the house that I should know about?" This way, if the agent or the seller does not disclose, you may have a case against them. You may also want to file a complaint with the local real estate commission against the agent who did not disclose all the facts.

In the future, you should have an independent professional home inspector check out the house. The smell should have alerted you to a possible problem, and you should really have asked questions before you went to closing.

Benny L. Kass is a Washington lawyer. Questions for this column can be submitted to benny@inman.com.